Decentralized Identity Solutions: Challenges And Innovations

According to Cointelegraph, zero-knowledge (ZK) proofs, a method of verifying information without revealing its specific contents, have gained popularity in creating decentralized identity products. However, Ingo Rübe, CEO and co-founder of KILT Protocol, highlighted the challenges in government and institutional adoption due to the technical complexity of ZK-proofs. In an interview, Rübe explained that decentralized identifiers, such as biometric data, could be selectively shared and verified onchain using Merkle Trees. This method, understood by all computer scientists, offers greater ease, speed, and efficiency compared to ZK-proofs. He also warned that the open-source software commonly used in ZK solutions could pose a risk of massive data breaches, as companies often rely on third-party libraries without clear accountability. Rübe emphasized the importance of using public permissionless blockchains to store credential validity, allowing users to own and create their digital identifiers, which are stored locally and verified through decentralized networks. The World Wide Web Consortium developed a standard for decentralized identity solutions in 2022, underscoring the growing interest in this field. Despite the technical barriers, several entities are exploring ZK-powered identity solutions. In October 2024, Buenos Aires announced the rollout of decentralized identification for residents using ZKsync Era. Additionally, on October 17, World, formerly known as Worldcoin (WLD), introduced the next generation of biometric data-collecting orbs and the World ID Credentials program. This initiative will enable individuals with NFT-enabled government passports to register their identity in the World system. Rübe noted that different approaches to decentralized identity solutions, including ZK-proofs, are suitable for various use cases. However, he likened the use of ZK-proofs for decentralized identity to “taking a bazooka and trying to kill a fly,” indicating that simpler methods might be more effective for certain applications.